Mortgage Practice Test

A mortgage is a loan specifically used to purchase real estate, where the property serves as collateral. Borrowers typically make a down payment, with the remaining amount financed over a set period, usually 15 to 30 years. Monthly payments consist of principal and interest, and may also include property taxes and insurance. If the borrower fails to make payments, the lender can foreclose on the property, reclaiming it as a form of repayment. Mortgages can come with fixed or adjustable interest rates, affecting the total cost over the loan term.